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ORD 16-815ORDINANCE NO. 16 -815 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF FEDERAL WAY, WASHINGTON, GRANTING LAKEHAVEN UTILITY DISTRICT, A MUNICIPAL CORPORATION, A NONEXCLUSIVE FRANCHISE TO OCCUPY THE RIGHTS -OF -WAY OF THE CITY OF FEDERAL WAY, WASHINGTON, THROUGH THE FRANCHISE AREA FOR THE PURPOSES OF CONSTRUCTING, MAINTAINING, REPAIRING, RENEWING, AND OPERATING A WATER AND SEWER SYSTEM WITHIN AND THROUGH THE CITY OF FEDERAL WAY AND ADDRESSING HYDRANT COSTS WITHIN CITY BOUNDARIES. WHEREAS, Lakehaven Utility District and the City of Federal Way have determined that it is in the best interests of the public and both parties that Lakehaven Utility District be granted a franchise from the City of Federal Way, in order to specify the rights and duties of Lakehaven to install, operate and maintain a water and sewer system including all related appurtenances located in certain rights -of -way as depicted in Exhibit A; and WHEREAS, RCW 35A.47.040 permits the-City of Federal Way to grant nonexclusive franchises for the use of public streets, bridges or other public ways for, inter alia, poles, conduits, tunnels, towers and structures, pipes and wires and appurtenances thereof for water, sewer, and other private and publicly owned and operated facilities for public service; and WHEREAS, in granting such a nonexclusive franchise, the City of Federal Way reserves such other powers and authorities granted to Washington code cities by general law; and WHEREAS, the parties acknowledge the Washington State Supreme Court's ruling in Lane v. Seattle that the cost of hydrants is a general government responsibility; and WHEREAS, Franchisee recognizes a benefit to its rate payers in not having the City attempt to assume its jurisdiction under the provisions of RCW Chapter 35.13A, Ordinance No 16-815 Page 1 of 30 NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF FEDERAL WAY, WASHINGTON, DOES HEREBY ORDAIN AS FOLLOWS: Section 1. Defmitions Where used in this Franchise the following terms shall be defined as follows: 1.1 "City" means the City of Federal Way, Washington, a municipal corporation of the State of Washington, and its respective successors and assigns. 1.2 "Council" means the City of Federal Way Council acting in its official capacity. 1.3 "Director" means the Public Works Director, or designee, of the City of Federal Way Public Works Department. 1.4 "Facilities" means all structures, antennas, equipment, pipes, mains, hydrants, valves, meters, service lines in the right -of -way manholes, clean outs, and all other related appurtenances owned or used by Franchisee and necessary for the distribution of water and collection of wastewater. The Parties acknowledge that the Franchisee deems sewer service lines to be owned by the property owner served by the service line. 1.5 "FWRC" means the Federal Way Revised Code. 1.6 "Franchise Area" means rights -of -way for public roads, streets, avenues, alleys, and highways of the City as set forth in Exhibit A. Exhibit A may be updated by the City upon the City's acquisition or vacation of rights of way and upon any annexation of area that is within the Franchisee's service area. 1.7 "Franchisee" means Lakehaven Utility District, a municipal corporation, and public utility, and its respective successors and assigns. Ordinance No 16 -815 Page 2 of 30 1.8 "Revenue" means the value proceeding or accruing from the performance of Franchisee's water and sewer business, which for the purposes of calculating the Franchise fee contemplated in Section 17, shall include only those proprietary water and sewer rates collected from Franchisee's retail customers with billing addresses that are within the corporate boundaries of the City. For the purposes of this definition, "revenue" shall not include the following: wholesale or contract water sales; maintenance charges for sewer systems not owned by Franchisee; hydrant meter water sales; penalties; late fees; meter shut -off or turn-on charges; impact fees; delinquent account charges; lien charges; telecommunications site lease payments; permit fees; surcharges; interest on fund balances; revenues from hydrant maintenance (fire suppression); connection charges; water or sewer system capacity rent; assessments; grants; contributed assets (contributions in aid of construction); loans; developer charges; income from legal settlements not related to retail water or sewer service; income from real property or equipment/vehicle sales; fees charged for Franchisee's services as expressed in Franchisee's Fees and Charges Resolution; street light revenues; labor, equipment, and material charges; or any other revenues that are not derived from the rates charged for the direct provision of water and sewer service to retail customers with billing addresses that are within the corporate boundaries of the City. Section 2. Grant/Acceptance 2.1 Grant of Franchise. The City does hereby grant to Franchisee, subject to the terms of this Franchise, the right, privilege, authority and franchise to: (a) Lay, construct, extend, repair, renew, and replace Facilities in the Franchise Area; and Ordinance No 16 -815 Page 3 of 30 (b) To charge and collect tolls, rates, and compensation for such utility service and such uses. 2.2 Acceptance by Franchisee. Franchisee shall have no rights under this Franchise, nor shall Franchisee be bound by the terms and conditions of this Franchise, unless Franchisee shall, within sixty (60) days after the date the City Council passes this Franchise, file with the City its written acceptance of this Franchise and all of its terms and conditions. Section 3. Conditions of Use 3.1 Non - Franchise Area City Property. This Franchise does not and shall not convey any right to Franchisee to install its Facilities on, under, over, across, or to otherwise use City -owned or leased properties of any kind outside the Franchise Area, or to install Facilities on, under, over, across or otherwise use any City owned or leased property within the Franchise Area other than public roads, streets, avenues, alleys, and highways of the City. The Franchisee shall place Facilities within the Franchise Area, but not on any other public property owned, in whole or in part, leased, or otherwise occupied by the City unless an easement is granted. 3.2 Termination of Easements. Franchisee agrees to voluntarily relinquish its easements on private property that has become City property pursuant to public projects when notified by the City. In exchange for the voluntary relinquishment of easements on private property that become public right -of -way, the City and Franchisee agree to the following: A. For the Project. The City agrees to pay Franchisee' s necessary relocation or adjustment costs of its water and/or sewer facilities on private property if required as part of project construction when the property will become City property. Ordinance No 16 -815 Page 4 of 30 B. Five Years after Completion of the Project. The City agrees to pay Franchisee's necessary relocation costs of its water and/or sewer facilities for five years after completion of the project in the event a City public project requires the relocation. Completion of the project means the action taken by the City Council during the regular City Council meeting to accept the project as complete. 3.3 Operation costs. To the extent permitted by law and as otherwise expressed in this agreement, Franchisee shall be solely responsible for the operation, maintenance, repair, and construction of its Facilities. 3.4 Facilities Abandonment. Franchisee will notify the City when a Facility has been deemed obsolete and its use discontinued. The Facility shall be removed by Franchisee, at its expense, within one hundred (180) days of the date the Facility's use is discontinued. The City may deem a Franchisee's facility obsolete if the Facility ceases to be operational for more than ninety (90) days and the Franchisee has not initiated repair or removal. If Franchisee fails to begin repair or remove the Facility, the City or its agent may cause the Facility to be removed pursuant to Section 14 of the Franchise; however, with the express written consent of the City, Franchisee may leave such Facilities in place. The City' s consent shall not relieve Franchisee of the obligation and/or costs to subsequently remove or relocate such Facilities at the City's request, in which case Franchisee shall perform such work at no cost to the City in accordance with Section 15. The provisions of this Section shall survive the expiration, revocation or termination of this Franchise. Section 4. Term. Subject to Franchisee filing its acceptance pursuant to Subsection 2.2, the term of this Franchise shall be for a period of ten (10) years commencing on the effective date of this Franchise, Ordinance No 16 -815 Page 5 of 30 unless terminated earlier pursuant to the terms of this Franchise or other applicable law. This Franchise may be extended by mutual written agreement of the parties for two (2) extensions of five (5) years. Section 5. Hydrant (Fire Suppression System) costs. The parties agree that during the term of the Franchise, Franchisee shall be responsible to operate and maintain all portions of the water system, including the fire hydrants (fire suppression system) and those components of the water system that provide fire suppression benefits within City boundaries. The City shall, during the term of this Franchise, pay Franchisee for the cost of maintaining the fire hydrants and those portions of the system that provide fire suppression benefits within City boundaries ( "fire hydrants "). Franchisee shall, during the term of this Franchise, indemnify and hold the City harmless from any costs associated with the maintenance of the water system, except the cost of maintaining the fire hydrants (fire suppression system). The amount of the charge for the cost of maintaining the fire hydrants (fire suppression system) shall be as established by Franchisee resolution. The parties agree that Franchisee shall begin charging and billing the City for the fire hydrant (fire suppression system) costs after June 30, 2016. The fire hydrant (fire suppression system) costs shall be billed to the City on a quarterly basis. Payment shall be due within forty -five (45) days from the invoice date. Section 6. Location of Facilities 6.1 Location. The location of existing Facilities, their depths below the surface of ground or grade of a right -of -way (if available), shall be submitted to the City in the form of a map showing the approximate location of Franchisee's existing water and sewer systems within the Franchise Area. Upon written request of the City, Franchisee shall update such map to reflect actual or Ordinance No 16 -815 Page 6 of 30 anticipated improvements to the Franchisee's water and sewer systems within the Franchise Area. Any such map (or update thereof) so submitted shall be for City informational purposes only and shall not obligate Franchisee to undertake any specific improvements, nor shall such map be construed as a proposal to undertake any specific improvements. 6.2 GIS Data. The Franchisee shall provide, at such time as Franchisee develops and employs Geographic Information System ( "GIS ") technology for its water and sewer system maps and records throughout its service area, information required in section 6.1 in digital GIS format for its Facilities within the Franchise Area. 6.3 Design Markings. In the event the City desires to design new streets or intersections, renovate existing streets, or make any other public improvements, Franchisee shall at the City's reasonable request, provide the location of Franchisee's underground Facilities within the Franchise Area by either field markings or by locating the Facilities on the City's design drawings, and shall provide all other reasonable cooperation and assistance to the City. 6.4 No Warranty or Waiver. Nothing herein is intended to expand, or relieve the parties of, their respective obligations arising under Chapter 19.122 RCW or other applicable law with respect to determining the location of utility facilities prior to construction. Further, neither the provisions of this Franchise nor the absence of any specific provision in this Franchise is intended to limit, detract from or render ineffective any disclaimer (including, without limitation, any disclaimer as to accuracy or completeness) placed by Franchisee on any map furnished to the City pursuant to Sections 6.1 and 6.2 of this Franchise. Ordinance No 16 -815 Page 7 of 30 Section 7. Noninterference of Facilities Franchisee agrees to maintain its Facilities and perform all work within the Franchise Area: (1) so as not to unreasonably interfere with the free passage of traffic, (2) in accordance with the laws of the State of Washington and City ordinances, regulations, resolutions, and rules, and (3) as required by the Director. Section 8. Requirement to Obtain Permits 8.1 Permits. Franchisee shall, at its expense, obtain all permits (including rights -of -way permits) and pay all fees required by applicable City ordinances, regulations, resolutions, and rules prior to commencing any work within the Franchise Area, excluding blanket permits for water and sewer routine maintenance work. Permit applications shall: (1) show the position and location of the Facilities to be constructed, laid, installed, or erected at that time; (2) show their relative position to existing rights -of -way or property lines upon prints drawn to scale, unless otherwise approved by the Director; (3) designate rights -of -way by their names and; (4) show improvements as required by the Director, such as, but not limited to, sidewalks, curbs, gutters, shoulders of roadway, ditches, paved roadways, roadways to property lines, turnouts, parking strips, telephone or electric distribution poles, and pipes existing on the ground to be occupied. The Franchisee shall specify the class and type of materials to be used, equipment to be used, and mode of safeguarding and facilitating the public traffic during construction. The manner of excavation, construction, installation, backfill, and temporary structures such as, but not limited to, traffic turnouts and road obstructions shall meet the standards of the FWRC and be satisfactory to the Director. All traffic control shall be in accordance with the right -of -way permit, and shall be in accordance with the Manual on Uniform Traffic Control Devices ( "MUTCD "). The Franchisee shall indicate on the right -of -way use permit application the Ordinance No 16 -815 Page 8 of 30 time needed to complete the work. The time needed to complete the work is subject to approval by the City as a condition of the issuance of the right -of -way permit. 8.2 Exception to Permit Requirement. In the event of an emergency in which Franchisee's Facilities within the Franchise Area are in a condition as to immediately endanger the safety or health of life, property or the environment, Franchisee may take action immediately to correct the dangerous condition without first obtaining any required permit so long as: (1) Franchisee informs the City of the nature and extent of the emergency and the work to be performed prior to or at the commencement of the work, if reasonably possible, or immediately following cessation of the emergency; and (2) such permit is obtained by Franchisee as soon as practicable thereafter. 8.3 Routine Maintenance. Franchisee shall have the right to conduct routine maintenance to repair, modify, supplement, replace or upgrade the Franchisee' s Facilities, provided that the Franchisee shall obtain any necessary right -of -way use permit and any other permits or authorizations required by all applicable federal, state, and local laws, rules, and regulations prior to the performance of any said routine maintenance. The following non - emergency related activities such as water main flushing, valve exercising, sanitary sewer line cleaning/inspection, and other activities as approved shall be allowed to occur under an annual maintenance blanket permit. 8.4 Notice of Entry. At least forty -eight (48) hours prior to entering right -of -way adjacent to private property to perform the installation, maintenance, repair, reconstruction, or removal of facilities, except those emergency activities exempted from permit requirements, a written notice describing the nature and location of the work to be performed shall be communicated to the private property occupant to be impacted by Franchisee's work. Examples of acceptable notice include but are not limited to a pre - printed door hanger, mailed letter, and/or sandwich boards. Ordinance No 16 -815 Page 9 of 30 Section 9. Standard of Performance The Franchisee shall not excavate for a distance of more than one hundred feet (100') without immediately backfilling and compacting to surface grade and permit requirements. Backfilled trench areas within a driving lane must be patched, either temporarily or permanently, or plated, before the end of the workday in which they have been opened. Trench areas within the right -of -way, but not within a driving lane, must also be plated, patched backfilled, and/or patched within the time limits specified by the City on the right -of -way use permit. Final surface restoration shall be completed within thirty (30) days and shall be equal to or better than the surface condition prior to permit issuance. Any asphalt overlay completed within the Franchise Area during a five (5) year period immediately prior to the date of permit application shall not be open cut by Franchisee unless required by an emergency or as approved by the Director. In the event of this emergency cut in new pavement, Franchisee shall install new asphalt overlay on the street that is open cut, for a minimum of 250 feet in both directions from the open cut, or pay a mitigation fee, or as determined otherwise by the Director. Franchisee shall, in carrying out any authorized activities within the Franchise Area, comply with all applicable laws, ordinances, codes, and standards, as now existing or hereafter adopted or amended, and shall comply with the terms of this Franchise, whether the work is performed by the Franchisee, its agents, employees, subcontractors, or other third parties at Franchisee's direction. Upon completion of any installation of Franchisee's Facilities within the Franchise Area, Franchisee shall submit to the Director plans, stamped by a Professional Engineer licensed by the State of Washington (if required in the permit), showing the "as- built" location of the Facilities. Nothing Ordinance No 16 -815 Page 10 of 30 herein is intended to relieve the parties of their respective obligations arising under applicable law with respect to determining the location of utility facilities. Section 10. Survey Markers and Monuments Franchisee shall, using a licensed surveyor, immediately replace all markers or monuments disturbed during any work by Franchisee within the Franchise Area. Franchisee shall pay all costs associated with such lost, destroyed or disturbed monuments or markers. Section 11. Surface Markings /Stakes Prior to Franchisee commencing any excavation work within the Franchise Area that disturbs any monument or marker, Franchisee shall, using a licensed surveyor, reference all monuments and markers relating to subdivisions, plats, highway, and other surveys. The reference points shall be located so that they shall not be disturbed during the Franchisee's operations under this Franchise. The method referencing these monuments or other points shall be approved by the City before placement. The construction shall be made as expeditiously as conditions permit, and as directed by the City. The cost of monuments or other markers lost, destroyed, or disturbed, and the expense of replacement of the monuments, shall be borne solely by the Franchisee. A complete set of reference notes for monuments, markers, and other ties shall be filed with the City. In the event of any conflict or inconsistency between this Section 11 and Chapter 19.122 RCW, as now existing or hereafter amended, Chapter 19.122 RCW will control. Section 12. Notification to Fire District Except in emergencies, if it is necessary to shut down or diminish the water pressure so that fire hydrants may be adversely affected, the Franchisee shall notify the appropriate fire district by telephone followed by faxed transmittal or written notification, that water pressure or fire flow Ordinance No 16 -815 Page 11 of 30 conditions have been affected. In case of an emergency, Franchisee shall contact the appropriate fire district as soon as circumstances allow. In case of a planned shutdown or diminished water flow, at least forty -eight (48) hour prior notification to the fire district is required. If more than one fire hydrant is affected, Franchisee must provide a map of the affected area to the fire district. Section 13. Right of City to Undertake Maintenance Work The laying, construction, maintenance, and operation of Franchisee's system of water and sewer pipes, and appurtenances granted under this Franchise shall not preclude the City, its accredited agents or its contractors from doing necessary maintenance work contiguous to the Facilities, provided that the Franchisee shall have sufficient notice of blasting, regrading, or excavating in order that Franchisee may protect its lines or pipe or property. Section 14. Right of City to Complete Work In the event Franchisee fails to comply with any applicable federal, state, or City laws, ordinances, rules, regulations, or standards or with any of the terms of this Franchise, and such noncompliance continues for a period of fourteen (14) days after Franchisee receives written notice from the City regarding the noncompliance, the City may, but in no event is the City obligated to, order any work completed, including without limitation Franchisee's obligation to repair pursuant to Section 16 herein and Franchisee's obligation to remove facilities pursuant to Section 15 herein. If the City causes such work to be done by its own employees or by any person or entity other than Franchisee, the City will notify the state Department of Health or Department of Ecology, as appropriate, prior to such work. The Franchisee shall, upon the City's written request, immediately reimburse the City for all reasonable costs and expenses incurred by the City in having such work performed, which costs may include the City's reasonable overhead expenses and attorneys' fees. Ordinance No 16 -815 Page 12 of 30 Section 15. Required Relocation of Facilities 15.1 City Reservation of Rights. The City reserves the right to use, occupy and enjoy the Franchise Area for any purpose that is not inconsistent with the terms and conditions of this Franchise. The Rights reserved herein include, without limitation, the construction of any City owned electrical, water, sewer or storm drainage line, installation of traffic signals, street lights, trees, landscaping, bicycle paths and lanes, equestrian trails, sidewalks, other pedestrian amenities, and other public street improvement projects. This Franchise is not an exclusive franchise. Without limiting Franchisee's rights under this Franchise, this Franchise shall not in any manner prohibit the City from granting other and further franchises in, under, over, upon, and along the Franchise Area. 15.2 City's Duties. In the event the City undertakes any work, including necessary maintenance within a right -of -way in which Franchisee's Facilities are located, and such work necessitates the relocation of Franchisee's then existing Facilities within the Franchise Area, the City shall: (a) Provide written notice to Franchisee requesting such relocation within a reasonable time prior to the commencement of such City work; (b) Pursuant to RCW 35.21.905, consult with Franchisee on projects that will require relocation to facilitate coordination of design; (c) Provide Franchisee with copies of pertinent portions of the City's plans and specifications for such City work so that Franchisee may relocate its Facilities to accommodate such City work; and (d) Coordinate to minimize conflicts between existing Facilities and Franchise Area improvements where possible. Ordinance No 16 -815 Page 13 of 30 15.3 Franchisee's Duties. After receipt of the City notice requesting the relocation of the Facilities pursuant to Subsection 15.2(a) and receipt of the plans and specifications pursuant to Subsection 15.2(b), Franchisee shall, within such reasonable time as approved by the Director, raise, lower, or move such Facilities within the Franchise Area at its sole cost and expense so as to conform to such new grades as may be established, and place the pipe in a location or position causing the least interference with the improvement, repair, or alteration contemplated by the City. 15.4 Exclusivity. Except as provided in Section 3.2 above, this Section 15 shall govern all relocations of Franchisee's Facilities required in accordance with this Franchise. Nothing in this Section 15 shall require Franchisee to bear any cost or expense in connection with the location or relocation of any Facilities existing under benefit of easement on property owned by a person or entity other than the City. Section 16. Damage Repair In case of damage by the Franchisee or by the Facilities of the Franchisee to rights -of -way, or to public and private improvements to rights -of -way, the Franchisee agrees to repair the damage at its own cost and expense. The Franchisee shall, upon discovery of such damage, immediately notify the City. The City will inspect the damage, and set a time limit for completion of the repair. If the City discovers damage caused by the Franchisee to rights -of -way, or to public and private improvements to rights -of -way, the City shall give the Franchisee notice of the damage and set a time limit so the Franchisee may repair the damage. In the event the Franchisee does not repair a right -of -way or an improvement to a right -of -way as required in this section, the City may repair the damage pursuant to Section 14 of this Agreement. The parties agree that they shall cooperate to investigate the cause of any damage to the right -of -way. The City shall hold Franchisee responsible for damage that is Ordinance No 16 -815 Page 14 of 30 determined, to a reasonable degree of certainty, to have resulted from issues with Franchisee's Facilities or the actions of Franchisee. Section 17. Franchise Fee and Utility Tax 17.1 The City levies a Franchise fee pursuant to this Franchise agreement to ensure that the City's transportation, landscape, drainage, and storm water system infrastructure is maintained and preserved during the ongoing operation of utility work in the City. Utility work within the City's right -of -way causes a deterioration of the right -of -way and requires the City to perform annual maintenance and longer -term capital improvements to maintain and preserve the City's right -of -way infrastructure. Administration of this Franchise, and annual maintenance and preservation work includes the work and cost for City employees, materials, engineering, inspection, administration of the Franchise agreement, planning, electronic mapping, pavement management, and other outside services for shoulder maintenance, street drain maintenance, roadside maintenance, street overlays, sweeping and mowing, and street and drainage capital projects.. If the City adopts a utility tax applicable to Franchisee, and Franchisee makes the payments to the City contemplated by such a utility tax, then the Franchise fee will be cancelled effective the beginning date for the utility tax. 17.2 In consideration of the rights granted to Franchisee by this agreement, Franchisee agrees: (a) To collect and distribute to the City a Franchise fee equal to 3.6 percent of Revenue generated within the City as defined in this agreement for 2016 -19, 3.8 percent for 2020 -23, and 4.0 percent for 2024 -26. The parties agree that Franchisee shall begin charging the Franchise fee with billings issued after June 30, 2016. The Franchise fee shall be paid on a monthly basis, with the first payment due July 15th and subsequent payments due the 15th Ordinance No 16 -815 Page 15 of 30 day of each month thereafter throughout the Franchise term. The amount of the monthly payment will equal the total Franchise fee owed during the prior year divided by twelve (2016 payments shall initially be based on 2015 revenues). It is agreed that by the thirtieth day following the end of the year, Franchisee shall calculate the actual Franchise Fee owing during the prior year and the amount of any underpayment shall be submitted to the City with the second payment of the year, or the amount of any overpayment shall be returned to the Franchisee within forty five (45) days of the date the amount is invoiced to the City. No interest shall accrue on any overpayment or underpayment owed pursuant to this section. (b) Should Franchisee be prevented by judicial or legislative action from collecting a Franchise fee on all or part of Franchisee's Revenue, Franchisee shall be excused from the collection and distribution of that portion of the Franchise fee. (c) Should a court of competent jurisdiction declare, or a change in law make the Franchise fee invalid, in whole or in part, then Franchisee's obligation to collect and distribute the Franchise fee contemplated under this section shall be temiinated in accordance with and to the degree required to comply with such court or legislative action. (d) Franchisee agrees that it will not pursue any legal challenge to the Franchise fee established under this Franchise. (e) Upon the City' s request, Franchisee shall make available Franchisee's books and records pertaining to all revenue derived by the Franchisee by virtue of the Franchise for City review, to verify the accuracy of payments. The City shall maintain the confidentiality of such information to the extent permitted by law. 17.3 In consideration for the Franchise fee collected and distributed to the City by Ordinance No 16 -815 Page 16 of 30 Franchisee, the City agrees: (a) To pay Franchisee for the cost of maintaining the fire hydrants (fire suppression system) within City boundaries as discussed in Section 5 of this Franchise. (b) To forego, during the term of the Franchise, the initiation of any proceedings under Chapter 35.13A RCW to assume the water and /or sewer service jurisdiction of Franchisee. Should a court of competent jurisdiction declare, or a change in law make the Franchise fee invalid, in whole or in part, then the assumption forbearance shall be cancelled and this Subsection 17.3(b) shall be stricken from the agreement. (c) To bear the cost of the Puget Sound Energy streetlights located in the right -of- way within City boundaries currently paid for by Franchisee and billed to Franchisee's customers after June 30, 2016. (d) If a lawsuit is filed challenging the Franchise fee, the City agrees to defend and hold Franchisee harmless from the cost/liability of such a lawsuit. 17.4 If the Franchise fee is declared invalid, in whole or in part, the parties agree to meet to discuss alternatives and amendments to this Franchise to retain the essential purposes of this section. Section 18. General Maintenance of Facilities Franchisee will maintain Facilities located within the Franchise Area in good operating condition and repair in a manner consistent with applicable law and prudent utility practice, and will comply with the following procedures: (a) Franchisee will provide the City, on an annual basis upon the City's written request, a proposed schedule of its routine Facility replacement or repair activities within the Franchise Area. Ordinance No 16 -815 Page 17 of 30 (b) Franchisee will meet, at least annually upon the City's written request, with a City representative to discuss the City' s concerns regarding the timing, scope, nature, or method of such repair or replacement activities within the Franchise Area. Section 19. Emergency Operations Prior to the beginning of each winter storm season, Franchisee will, at the request of the City, attend an annual coordination meeting with the City to discuss Franchisee' s Emergency Response Plan. At the request of the City, a copy of those portions of Franchisee's Emergency Response Plan that Franchisee makes generally publicly available will be provided to the City at the coordination meeting, along with appropriate telephone number and pager numbers during each emergency. Section 20. Default 20.1 Notice of Default. If Franchisee shall fail to comply with any of the provisions of this Franchise, the City may serve a written notice to Franchisee ordering such compliance and Franchisee shall have sixty (60) days from the receipt of such notice in which to comply. 20.2 Revocation of Franchise. If Franchisee is not in compliance with this Franchise after the expiration of the sixty (60) day period, the City may, by ordinance, declare an immediate forfeiture of this Franchise; provided, however, if any failure to comply with this Franchise by Franchisee cannot reasonably be corrected with due diligence within such sixty (60) day period (Franchisee's obligation to comply and to proceed with due diligence being subject to unavoidable delays and events beyond its control), then the time within which Franchisee may so comply shall be extended, upon notice to the Director, for such time as may be reasonably necessary and so long as Franchisee commences promptly and diligently to effect such compliance. In the event of the City's Ordinance No 16 -815 Page 18 of 30 cancellation of this Franchise, all rights and obligations associated therewith, including the Franchisee's obligation to pay a Franchise fee, shall be terminated. Section 21. Limited Rights This Franchise is intended to convey only a limited right and interest to Franchisee in the Franchise Area. This Franchise is not a warranty of title or conveyance of any ownership interest in or to the Franchise Area to Franchisee. Section 22. Eminent Domain The existence of this Franchise shall not preclude the City from acquiring by condemnation, in accordance with applicable law, all or a portion of Franchisee's Facilities within the Franchise Area for the fair market value thereof. In determining the value of such Facilities, no value shall be attributed to the right to occupy the Franchise Area conferred by this Franchise. Section 23. Vacation If at any time the City, by ordinance, vacates all or any portion of public streets, roads and /or rights -of -way within the Franchise Area, the City will not be liable for any damages or loss to the Franchisee by reason of such vacation. The City agrees to exert reasonable good faith efforts to reserve an easement for Franchisee's existing or proposed Facilities when a street, public way, or area is vacated. The City may, after thirty (30) days' written notice to Franchisee, terminate this Franchise with respect to any such vacated area. Section 24. Compliance with Laws Franchisee shall comply with all applicable federal, state, and City laws, ordinances, resolutions, regulations, standards and procedures, as now existing or hereafter amended or adopted, including without limitation the State Environmental Protection Act; the Federal Occupational Safety Ordinance No 16 -815 Page 19 of 30 and Health Act of 1970 ( "OSHA "), and the Washington Safety .and Health Act of 1973 ( "WISHA ") provided, however, that if any term or condition of this Franchise and any term or condition of any City law, code, ordinance, resolution, regulation, standard, procedure, permit, or approval are in conflict, the term or condition of this Franchise will control. Section 25. Guarantee Franchisee shall guarantee work completed by the Franchisee after the date of this franchise for a period of twenty (20) years from completion against settlement or conditions requiring repair. Section 26. Charge for Administrative Costs Nothing herein shall preclude the City from recovering any administrative costs incurred by the City in the approval of permits or in the supervision, inspection or examination of all work by Franchisee in the Franchise Area as prescribed in accordance with applicable provisions of the City's code. Section 27. Indemnification Franchisee agrees to indemnify and hold harmless and defend the City, its elected officials, officers, employees, agents, and volunteers from any and all claims, demands, losses, actions and liabilities (including costs and all attorneys' fees) to or by any and all persons or entities, including, without limitation, their respective agents, licensees, or representatives, arising from, resulting from, or connected with this Franchise to the extent caused in part or in whole by the acts, errors or omissions of the Franchisee, its officers, partners, shareholders, agents, employees, or by the Franchisee's breach of this Franchise. This Section shall not be construed to require Franchisee to indemnify, hold harmless or defend the City against claims or damages arising from the negligence of the City, its agents, or employees. In the event any claim, demand, suit or action is commenced Ordinance No 16 -815 Page 20 of 30 against the City that constitutes an obligation of Franchisee pursuant to this Section 27, the City shall promptly notify Franchisee thereof, and Franchisee shall defend any such claim, demand, suit or action. Franchisee shall not settle or compromise any such suit or action except with prior written consent of the City, which shall not be unreasonably withheld. The City shall have the right at all times to participate through its own attorney in any suit or action which arises pursuant to this Franchise when the City determines that such participation is required to protect the interest of the City or the public. In the event it is determined that RCW 4.24.115 applies to this Franchise, Franchisee agrees to defend, hold harmless and indemnify the City to the maximum extent permitted thereunder, to the full extent of Franchisee's negligence. Section 28. Insurance 28.1 Minimum Limits. The Franchisee agrees to carry as a minimum, the following insurance, in such forms and with such carriers as are satisfactory to the City. (a) Workers compensation and employer's liability insurance in amounts sufficient pursuant to the laws of the State of Washington; (b) Commercial general liability insurance with limits of liability not less than $5,000,000 each occurrence and $5,000,000 aggregate for bodily injury, including personal injury or death, products liability, contractual coverage, operations, explosion, collapse, underground and property damage; and (c) Automobile Liability insurance with limits of liability not less than $5,000,000 each accident for bodily injury, or death and property damage. 28.2 Mandatory Insurance Provisions. The commercial general liability insurance and automobile liability insurance policies shall be endorsed to contain the following provisions: Ordinance No 16 -815 Page 21 of 30 (a) The City, its officers, elected officials, employees, and volunteers are to be named as additional insured; (b) Coverage shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer's liability; (c) Coverage shall not be suspended, canceled, modified or reduced except after thirty (30) days' prior written notice to the City delivered by certified mail, return receipt requested; and (d) Coverage shall be primary as to the City, its officers, officials, employees, and volunteers. Any insurance or self - insurance by the City, its officers, officials, employees, or volunteers shall be in excess of Franchisee' s required insurance. 28.3 Verification of Coverage. Franchisee shall furnish the City with certificates of insurance and original endorsements evidencing the coverages required by this Section. The certificates and endorsements shall be signed by a person authorized by the insurer to bind coverage on its behalf and must be received and approved by the City annually. At the City's request, Franchisee shall deliver certified copies of all required insurance policies. 28.4 Self - Insurance. In satisfying the insurance requirements set forth in this Section, Franchisee may self - insure against such risks in such amounts as are consistent with good utility practices. Franchisee shall provide the City with sufficient written evidence, upon request, that such insurance (or self - insurance) is being so maintained by Franchisee. Such written evidence shall include, to the extent available from Franchisee' s insurance carrier, a written certificate of insurance with respect to any insurance maintained by Franchisee in compliance with this Section. Ordinance No 16 -815 Page 22 of 30 Section 29. General Provisions 29.1 Entire Agreement. This Franchise contains all of the agreements of the Parties with respect to any matter covered or mentioned in this Franchise and no prior agreements or understandings pertaining to any such matters shall be effective for any purpose. 29.2 Modification. No provision of this Franchise may be amended or added to except by agreement in writing signed by both of the Parties. 29.3 Assignment. Franchisee shall not have the right to transfer or assign, in whole or in part, any or all of its obligations and rights hereunder without the prior written consent of the City, which consent will not be unreasonably withheld. Any assignee shall, within thirty (30) days of the date of any approved assignment, file written notice of the assignment with the City together with its written acceptance of all terms and conditions of this Franchise. Notwithstanding the foregoing, Franchisee shall have the right, without such notice or such written consent, to mortgage its rights, benefits and privileges in and under this Franchise to the Trustee for its bondholders. 29.4 Attorneys' Fees. In the event the City or the Franchisee defaults on the performance of any terms in this Franchise, and the Franchisee or the City places the enforcement of the Franchise or any part thereof or the collection of any monies due, or to become due hereunder, in the hands of an attorney, or files suit upon the same, the prevailing party shall be entitled to an award of all reasonable attorneys' fees, costs, and expenses. The venue for any dispute related to this Franchise shall be King County, Washington. 29.5 No Waiver. Failure of either party to declare any breach or default by the other party immediately upon the occurrence thereof, or delay in taking any action in connection therewith, shall not waive such breach or default, but such party shall have the right to declare any such breach or Ordinance No 16 -815 Page 23 of 30 default at any time. Failure of either party to declare one breach or default, does not act as a waiver of such party's right to declare another breach or default. 29.6 Governing Law. This Franchise shall be made in and shall be governed by and interpreted in accordance with the laws of the State of Washington. 29.7 Authority. Each individual executing this Franchise on behalf of the City and Franchisee represents and warrants that such individual is duly authorized to execute and deliver this Franchise on behalf of the Franchisee or the City. 29.8 Notices. Any notices required to be given by the City to Franchisee or by Franchisee to the City shall be delivered to the parties at the following addresses: Franchisee: Lakehaven Utility District Attn: General Manager 31627 1st Ave South P.O. Box 4249 Federal Way, WA 98063 City: City of Federal Way Attn: City Attorney 33325 8th Avenue South Federal Way, WA 98003 Any notices may be delivered personally to the addressee of the notice or may be deposited in the United States mail, postage prepaid, to the address set forth herein. Any notice so posted in the United States mail shall be deemed received three (3) days after the date of mailing. 29.9 Captions. The respective captions of the sections of this Franchise are inserted for convenience of reference only and shall not be deemed to modify or otherwise affect in any respect any of the provisions of this Franchise. Ordinance No 16 -815 Page 24 of 30 29.10 Remedies Cumulative. Any remedies provided for under the terms of this Franchise are not intended to be exclusive but shall be cumulative with all other remedies available to the City at law, in equity, or by statute. Section 30. Severability Should any section, subsection, paragraph, sentence, clause, or phrase of this Franchise, or its application to any person or situation, be declared unconstitutional or invalid for any reason, such decision shall not affect the validity of the remaining portions of this Franchise or its application to any other person or situation. The City Council of the City of Federal Way hereby declares that it would have adopted this Franchise and each section, subsection, sentence, clauses, phrase, or portion thereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses, phrases, or portions be declared invalid or unconstitutional. Section 31. Ratification Any act consistent with the authority and prior to the effective date of this Franchise is hereby ratified and affirmed. Section 32. Implementation The terms of the previous Franchise and any amendments shall control until the effective date of this Franchise. Section 33. Effective Date This Franchise shall take effect and be in full force thirty (30) days after its passage and publication, according to law (see Effective Date below). PASSED by the City Council of the City of Federal Way this 1St day of March, 2016. Ordinance No 16-815 Page 25 of 30 ATTEST: ERK, STEPHANIE C RTNEY, CMC AP : 7• VED A TQ� AORM: 1 CITY ATT % E FILED WITH THE CITY CLERK: 02/12/2016 PASSED BY THE CITY COUNCIL: 03/01/2016 PUBLISHED: 03/04/2016 EFFECTIVE DATE: 04/03/2016 ORDINANCE NO.: 16 -815 Ordinance No 16-815 Page 26 of 30 • • ACCEPTANCE: The undersigned hereby accepts all the rights and privileges of the above granted Franchise and acknowledges that such rights and privileges are subject to and limited by all of the terms,conditions and obligations contained therein. wG DATED this 22 day of wr (Iv , 2016. LAKEHAVEN UTILITY DISTRICT By: Its: " Ordinance No 16-815 Page 27 of 30 EXHIBIT A Location of Facilities within Franchise Area Ordinance No 16 -815 Page 28 of 30 LW Date: Marc, 2.10 City of Water Service City of Fexa€ Way PO Box 9t18 Fh.x.st Way. Ws. x:.63 Federal Way Franchise Area II')2 3.835 -10);) IW)twe.v..olyr,bece••• •N y :.-• 1 Exhibit A -1 Kent Des Moines r'771Ci .. /1 P+L1-1 a --�' t J 1 y r --' I ederaI I - �� { I /��� k -rr �t a c� _iF 1 - \ fir. \ .,.s.. - -�°. r� J — r4- — i r'1\ as r1 c ST I -11 HIV I '��r ►- E ti — I'� I t r . - ' J J \ Auburn 1 - I ;‘,,,,,,:\\ Tacoma I T\� g H e ) :l- •••••• _ 11 N s i 4 J I • 4 _ I 347L _110_11 l .4 ii 4, „/„. \i( 1 Legend Franchise Area I_ JWaterServiceArea Federal Way City Limits 1 / L/ NEIton Fife Edgewood r,,, or This map is intended for use iik, as a graphical representation. �..� Federal Way 0 0.5 I The City Federal Way saes of makes no warranty as to its accuracy. ^. e - •�•=•?-915■1 •,o8 :15 w.,' 11.'. fi1iULI 4,1hoa.LUDn- sIE'K'. Ti.).: Ordinance No 16-815 Page 29 of 30 Map Oar: March, 2010 City of Sewer Service Cayof Federal Way PO.8ox 97.18 Federal Way Franchise Area {ra Way, Ws. 98063 (W) w.rw.o4ofleaeraeway.c:-, -, Exhibit A -2 Kent Dus Moines A /fir %1 ,,.-� _ , 1 �Federal ' ' ' 1�'ay E... I47 ,d r1 4 ''` 5 �- _ �\ I L I 1 j l s i ffi y _-___ 1-f- LI jf -tip / 1 _�'I_ I \\� X11 - Ny4.. /AV Tacoma \I J {I � ,-- sr fj ( { sr l Snd.lgt_ � � i I \ Auburn i I I2, L 1 , , % r 1 r f \-� NJ -'- - '- 1 I' r % I `i3Mi.ii ., !. - .. r \ -1 — / Legend Franchise Area I_ J Sewer Service Area Federal Way City Limits IN ` /I ,-.r \J J A Milton Fife Edyewood cur or This map is intended for use Federal Way 0 0.5 1 as Federal Wayamakes Miles no warranty as to its accuracy. .e,1- V.k._. __.; :.::.sAs ^r':,_J LI A.I.e_ .LU USFwerK• Ai xc Ordinance No 16 -815 Page 30 of 30